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As President Donald Trump embraces more policy focused on affordability, some lawmakers have pushed to expand tax credits for families.
The Republican Study Committee this week released a framework for a second budget bill, known as “Reconciliation 2.0,” which outlines priorities like homeownership, health care, energy prices and financial support for families. Another reconciliation bill has support from House Speaker Mike Johnson and House Budget Committee Chairman Jodey Arrington, R-Texas., among others.
One proposal from the framework would expand access to the child and dependent care tax credit, or CDCTC, which partially offsets up to $6,000 of care expenses for two or more “qualifying individuals” — typically children under age 13 — when parents who file taxes jointly both work.
The CDCTC is often confused with the child tax credit, or CTC, of up to $2,200 per child under age 17 for the 2025 tax year. One key difference is the CTC doesn’t require both parents who file taxes jointly to earn income.
The proposal comes during a mid-term election year as Republicans fight to defend a razor-thin majority in the House. Both parties are pushing messaging about affordability as many Americans struggle with the cost of housing, food, electricity and health care.
Here are some key things to know about the child and dependent care tax credit, and how it could change under the Republican Study Committee’s framework.
Who benefits from the CDCTC
Only a small percentage of families claim the child and dependent care tax credit each year.
Roughly 6.5 million returns filed the form to claim the child and dependent care tax credit for tax year 2022, according to the latest IRS estimates. By comparison, nearly 37 million returns claimed the child tax credit or credit for other dependents.
Currently, about 13% of families with children receive the child and dependent care tax credit, according to a 2025 Tax Policy Center analysis. That’s compared to almost 90% of families with children who receive the child tax credit.
While Trump’s “big beautiful bill” expanded both tax credits, “there’s still a lot of interest in further reforms,” according to Garrett Watson, director of policy analysis at the Tax Foundation, a nonprofit think tank.
How the CDCTC could change
The Republican framework aims to expand child and dependent care tax credit eligibility by removing the work requirement for both parents who file taxes jointly.
If enacted, this would end the “marriage penalty” to support stay-at-home parents and young families, according to the outline. However, it’s unclear whether Reconciliation 2.0 will happen in 2026 amid competing legislative priorities, experts say.
Typically, marriage penalties create a higher tax burden for married couples filing jointly compared to their taxes owed when filing as single individuals.
“This isn’t a marriage penalty like that,” said Margot Crandall-Hollick, a principal research associate at the Urban-Brookings Tax Policy Center. “It is an elimination of a work requirement for moderate and higher-income married couples.”
Currently, the child and dependent care tax credit is non-refundable, which means the benefit is limited by a return’s total taxes owed. Non-refundable credits are generally less beneficial to lower-income families because they typically owe little to no income taxes, said Crandall-Hollick.
While there’s been bipartisan interest to make the credit refundable, that change wasn’t included in the final version of Trump’s “big beautiful bill,” she said.